Mining group Xstrata's board has approved an investment of $1.1bn to develop the Ulan West underground thermal coal mine in the central west of New South Wales, Australia.
The Ulan West underground longwall mine will produce 6.7 million tonnes per year of export thermal coal, with a life of mine of approximately 18 years and cash costs at the bottom of the second quartile of the industry cost curve.
Situated within the existing Ulan mine complex, Ulan West will complement the Ulan No 3 underground mine and use some of the existing infrastructure at the Ulan complex.
Subject to the receipt of a development approval and other government environmental approvals, construction of the mine is expected to commence in late 2010, with the first longwall coal to be extracted in 2014.
Peter Freyberg, chief executive of Xstrata Coal, said: "The development of Ulan West will add another low-cost, efficient longwall operation toXstrata Coal's portfolio, leveraging a known resource base at Ulan to increase our production volumes by at least seven million tonnes per annum to satisfy growing demand for export quality thermal coal in Asia."
